IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v140y2012i2p604-613.html
   My bibliography  Save this article

Governance forms drivers in bio-pharmaceutical inter-firm relationships

Author

Listed:
  • Lo Nigro, Giovanna
  • Perrone, Giovanni
  • Chiapparrone, Silvia

Abstract

Since the first theoretical papers on Transaction Cost Economy, several studies have addressed the problem of designing governance forms in inter-firm relationship. Scholars have deeply investigated the problem and several theories have been proposed to face with it. The biopharmaceutical industry is one of the most interesting testbeds for understanding dynamics and rationality of governance forms in IFRs; indeed, in this industry the advent of the biotechnology has not been disruptive as in other industries, so that the newcomers, the biotech companies, and the incumbents, the pharmaceutical ones, have incurred in several types of IFRs such as licensing agreements, non-equity alliances, equity alliances and mergers and acquisitions. Thus, several papers have tried to investigate what kind of drivers influence the choice of the governance form in this industry, but most of them have focused on general characteristics of inter-firm agreements, such as the investment specificity, the number of prior ties, the technology distance and so forth. Differently from other researches, in this paper, we focus on specific characteristics of IFRs in the biopharma industry and we build a theoretical framework consisting of 13 drivers that are able to influence the governance mode of IFRs in this industry. We test our theoretical framework through an explorative empirical analysis. Even if more confirmative empirical analysis is needed, the empirical results evidence the validity of the theoretical framework proposed in this paper and provide some interesting managerial implications.

Suggested Citation

  • Lo Nigro, Giovanna & Perrone, Giovanni & Chiapparrone, Silvia, 2012. "Governance forms drivers in bio-pharmaceutical inter-firm relationships," International Journal of Production Economics, Elsevier, vol. 140(2), pages 604-613.
  • Handle: RePEc:eee:proeco:v:140:y:2012:i:2:p:604-613
    DOI: 10.1016/j.ijpe.2011.09.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527311003896
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.ijpe.2011.09.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. van de Vrande, Vareska & Vanhaverbeke, Wim & Duysters, Geert, 2009. "External technology sourcing: The effect of uncertainty on governance mode choice," Journal of Business Venturing, Elsevier, vol. 24(1), pages 62-80, January.
    2. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    3. Valérie Sabatier & Vincent Mangematin & Tristan Rouselle, 2010. "Orchestrating networks in the biopharmaceutical industry: small hub firms can do it," Grenoble Ecole de Management (Post-Print) hal-00468340, HAL.
    4. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    5. Blomqvist, K. & Kylaheiko, K. & Virolainen, V. -M., 2002. "Filling a gap in traditional transaction cost economics: : Towards transaction benefits-based analysis," International Journal of Production Economics, Elsevier, vol. 79(1), pages 1-14, September.
    6. Gupta, Abhishek & Pawar, Kulwant S. & Smart, Palie, 2007. "New product development in the pharmaceutical and telecommunication industries: A comparative study," International Journal of Production Economics, Elsevier, vol. 106(1), pages 41-60, March.
    7. Shanthi Gopalakrishnan & Joanne L. Scillitoe & Michael D. Santoro, 2008. "Tapping Deep Pockets: The Role of Resources and Social Capital on Financial Capital Acquisition by Biotechnology Firms in Biotech–Pharma Alliances," Journal of Management Studies, Wiley Blackwell, vol. 45(8), pages 1354-1376, December.
    8. Higgins, Matthew J. & Rodriguez, Daniel, 2006. "The outsourcing of R&D through acquisitions in the pharmaceutical industry," Journal of Financial Economics, Elsevier, vol. 80(2), pages 351-383, May.
    9. Daniel A. Levinthal & James G. March, 1993. "The myopia of learning," Strategic Management Journal, Wiley Blackwell, vol. 14(S2), pages 95-112, December.
    10. Aleda V. Roth, 2007. "Applications of Empirical Science in Manufacturing and Service Operations," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 353-367.
    11. Patricia M. Danzon & Andrew Epstein & Sean Nicholson, 2007. "Mergers and acquisitions in the pharmaceutical and biotech industries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(4-5), pages 307-328.
    12. Coombs, Joseph E. & Mudambi, Ram & Deeds, David L., 2006. "An examination of the investments in U.S. biotechnology firms by foreign and domestic corporate partners," Journal of Business Venturing, Elsevier, vol. 21(4), pages 405-428, July.
    13. Varis, Jari & Virolainen, Veli-Matti & Puumalainen, Kaisu, 2004. "In search for complementarities--partnering of technology-intensive small firms," International Journal of Production Economics, Elsevier, vol. 90(1), pages 117-125, July.
    14. Rothaermel, Frank T., 2001. "Complementary assets, strategic alliances, and the incumbent's advantage: an empirical study of industry and firm effects in the biopharmaceutical industry," Research Policy, Elsevier, vol. 30(8), pages 1235-1251, October.
    15. Mary Tripsas, 1997. "Unraveling The Process Of Creative Destruction: Complementary Assets And Incumbent Survival In The Typesetter Industry," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 119-142, July.
    16. DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G., 2003. "The price of innovation: new estimates of drug development costs," Journal of Health Economics, Elsevier, vol. 22(2), pages 151-185, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. García-Cáceres, Rafael Guillermo & Torres-Valdivieso, Sergio & del Razo-Hernandez, Adolfo, 2024. "Governance forms of the pharmaceutical supply chain of Bogota, Colombia," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    2. Giovanna Lo Nigro & Azzurra Morreale & Lorenzo Abbate, 2016. "An Open Innovation Decision Support System to Select a Biopharmaceutical R&D Portfolio," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 37(6), pages 392-406, September.
    3. Brofman Epelbaum, Freddy Moises & Garcia Martinez, Marian, 2014. "The technological evolution of food traceability systems and their impact on firm sustainable performance: A RBV approach," International Journal of Production Economics, Elsevier, vol. 150(C), pages 215-224.
    4. Lo Nigro, Giovanna & Morreale, Azzurra & Enea, Gianluca, 2014. "Open innovation: A real option to restore value to the biopharmaceutical R&D," International Journal of Production Economics, Elsevier, vol. 149(C), pages 183-193.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bruce Rasmussen, 2010. "Innovation and Commercialisation in the Biopharmaceutical Industry," Books, Edward Elgar Publishing, number 13680.
    2. Bae, Joonhyung & Ozmel, Umit, 2024. "The interplay between product development failures and alliance portfolio properties in the formation of exploration versus exploitation alliances," Journal of Business Research, Elsevier, vol. 177(C).
    3. Carolin Haeussler & Matthew J. Higgins, 2012. "Explaining Preferences for Control Rights in Strategic Alliances: A Property Rights and Capabilities Perspective Approach," NBER Working Papers 18364, National Bureau of Economic Research, Inc.
    4. Ye Jin Lee & Kwangsoo Shin & Eungdo Kim, 2019. "The Influence of a Firm’s Capability and Dyadic Relationship of the Knowledge Base on Ambidextrous Innovation in Biopharmaceutical M&As," Sustainability, MDPI, vol. 11(18), pages 1-17, September.
    5. Manuel Guisado-González & Jennifer González-Blanco & José Luis Coca-Pérez, 2019. "Exploration, exploitation, and firm age in alliance portfolios," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(4), pages 387-406, December.
    6. Billette de Villemeur, Etienne & Versaevel, Bruno, 2019. "One lab, two firms, many possibilities: On R&D outsourcing in the biopharmaceutical industry," Journal of Health Economics, Elsevier, vol. 65(C), pages 260-283.
    7. Ng, Desmond W., 2011. "Thinking Outside the Box: An Absorptive Capacity Approach to the Product Development Process," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(3), pages 1-28, September.
    8. Joshua S. Gans & David B. Ridley, 2013. "Innovation Incentives under Transferable Fast-Track Regulatory Review," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 789-816, September.
    9. Massimo Colombo & Liliana Doganova & Evila Piva & Diego D’Adda & Philippe Mustar, 2015. "Hybrid alliances and radical innovation: the performance implications of integrating exploration and exploitation," The Journal of Technology Transfer, Springer, vol. 40(4), pages 696-722, August.
    10. repec:pab:wpbsad:16.01 is not listed on IDEAS
    11. Liliana Doganova, 2009. "Entrepreneurship as a process of collective exploration," Working Papers halshs-00431695, HAL.
    12. Donald E. Bowen & Laurent Frésard & Gerard Hoberg, 2023. "Rapidly Evolving Technologies and Startup Exits," Management Science, INFORMS, vol. 69(2), pages 940-967, February.
    13. Manuel Hermosilla, 2021. "Rushed Innovation: Evidence from Drug Licensing," Management Science, INFORMS, vol. 67(1), pages 257-278, January.
    14. Wen-Bin Chuang & Hui-lin Lin & Chien-Wei Wu, 2015. "Does Institutional Quality Strengthen The Positive Influence of Offshore R&D Strategy on the Firm Productivity?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(2), pages 279-294, February.
    15. Konstantinos Grigoriou & Frank T. Rothaermel, 2017. "Organizing for knowledge generation: internal knowledge networks and the contingent effect of external knowledge sourcing," Strategic Management Journal, Wiley Blackwell, vol. 38(2), pages 395-414, February.
    16. Abhirup Chakrabarti & Will Mitchell, 2013. "The Persistent Effect of Geographic Distance in Acquisition Target Selection," Organization Science, INFORMS, vol. 24(6), pages 1805-1826, December.
    17. Sarr, Mare & Swanson, Timothy, 2011. "Intellectual Property and Biodiversity: When and Where are Property Rights Important?," Climate Change and Sustainable Development 119101, Fondazione Eni Enrico Mattei (FEEM).
    18. Schön, Benjamin & Pyka, Andreas, 2013. "The success factors of technology-sourcing through mergers & acquisitions: An intuitive meta-analysis," FZID Discussion Papers 78-2013, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    19. Wang, Wenyu, 2018. "Bid anticipation, information revelation, and merger gains," Journal of Financial Economics, Elsevier, vol. 128(2), pages 320-343.
    20. Erik E. Lehmann & Manuel T. Schwerdtfeger, 2016. "Evaluation of IPO-firm takeovers: an event study," Small Business Economics, Springer, vol. 47(4), pages 921-938, December.
    21. Kai Li & Jiaping Qiu & Jin Wang, 2019. "Technology Conglomeration, Strategic Alliances, and Corporate Innovation," Management Science, INFORMS, vol. 65(11), pages 5065-5090, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:140:y:2012:i:2:p:604-613. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.